Balloon Payment Calculator
A balloon loan has small, regular payments based on a long amortization schedule, but the loan term is shorter, so a large lump sum, the balloon payment, falls due at the end. It is common in commercial mortgages and some auto and business loans, where lower monthly payments are attractive and the borrower expects to refinance or sell before the balloon comes due. This calculator computes both pieces: the monthly payment, based on the longer amortization length, and the remaining balance at the end of the shorter term, which is the balloon. It does this by amortizing the loan month by month at the given rate. Enter a 200,000 dollar loan at 6 percent, amortized over 30 years with a 5 year balloon term, and the tool returns a monthly payment of about 1,199.10 dollars and a balloon of about 186,108.71 dollars due after 5 years. Seeing the balloon amount in advance is essential, because it is far larger than any single monthly payment and usually requires a plan to refinance, sell or pay it off. Because the amortization is fully determined by the inputs, every figure is computed deterministically. The complete method and a worked example that reconciles exactly to the calculator above appear in full below.
A balloon loan pays a small monthly amount on a long amortization, then a lump sum at a shorter term. A $200,000 loan at 6%, amortized over 30 years with a 5-year balloon, pays $1,199.10 monthly and a $186,108.71 balloon.
Balloon payment method
payment = L x r / (1 - (1 + r)^-N), N = amortization months
balance after k months = L x (1+r)^k - payment x ((1+r)^k - 1) / r
balloon = balance after the balloon-term months (k = term x 12)
The monthly payment is set by the long amortization length. The loan is then amortized to the end of the shorter balloon term; the balance still owed at that point is the balloon payment.
Worked example
A 200,000 dollar loan at 6 percent, amortized over 30 years, with a 5 year balloon term.
- Monthly rate r = 6% / 12 = 0.005; amortization months N = 30 x 12 = 360
- Payment = 200,000 x 0.005 / (1 - 1.005^-360) = 1,199.10 dollars
- Balloon months k = 5 x 12 = 60
- Balance after 60 months = 200,000 x 1.005^60 - 1,199.10 x (1.005^60 - 1) / 0.005 = 186,108.71 dollars
These are the calculator's default inputs, so the result above matches the widget exactly.
Balloon Payment Calculator: frequently asked questions
What is a balloon payment?
It is a large lump sum due at the end of a balloon loan's term. Monthly payments are based on a longer amortization schedule, so they stay low, but the remaining balance must be paid off all at once when the shorter term ends.
How is the balloon amount found?
The loan is amortized at the monthly payment until the end of the balloon term; the balance still owed at that point is the balloon. This calculator amortizes the loan and reports that remaining balance.
Why choose a balloon loan?
Balloon loans offer lower monthly payments than a fully amortizing loan of the same short term, which can suit borrowers who expect to sell or refinance before the balloon falls due. The trade-off is the large sum owed at the end.
What happens if I cannot pay the balloon?
You typically must refinance, sell the asset, or default. Because the balloon is much larger than a monthly payment, it is important to plan for it well in advance and not assume refinancing will always be available.
Is the monthly payment based on the term or the amortization?
On the amortization length, which is longer than the term. That is what keeps the monthly payment low. The shorter term only determines when the balloon, the leftover balance, comes due.
Official sources
- Loans, interest and borrowing basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.